EX 4-17 Closing entries with net loss Rainbow Services Co. offers its services t
ID: 2340954 • Letter: E
Question
EX 4-17 Closing entries with net loss Rainbow Services Co. offers its services to individuals desiring to improve their personal images After the accounts have been adjusted at August 31, the end of the fiscal year, the following balances were taken from the ledger of Rainbow Services: Obj. 3 Retained Earnings Dividends Fees Earned Wages Expense $2,650,000 Rent Expense $185,000 26,200 ,050,000 Miscellaneous Expense 28,600 10,000 Supplies Expense 886,000 Journalize the four entries required to close the accounts.Explanation / Answer
solution:
given that Rainbow Services Co. offers its services to individuals desiring to improve their personal images .
also stated that After the accounts have been adjusted at August 31, the end of the fiscal year and are as foolws
Retained Earnings $2,650,000
Rent Expense $185,000
Dividends 10,000
Supplies Expense 26,200
Fees Earned 1,050,000
Miscellaneous Expense 28,600 and
Wages Expense 886,000
enteries required to close the acconts :
(1)
the above entry is used to close revenues to income summary
(2)
this entry is used to transfer dividends
(3)
this entry is passed to close expenses to income summary
(4)
net incxome/loss = revenue - total expense
revenue =1050000
total exp = 185000+26200+28600+886000
=1125800
therefore net income/loss =1050000-1125800 =(75800)
as result is negtaive it is net loss
net loss=75800
entry to pass $75800 net loss to income summary account .
aug 31 fees earned a/c 1050000 to incone summary 1050000Related Questions
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